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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> HM Revenue and Customs v Ruas [2010] EWCA Civ 291 (23 March 2010) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2010/291.html Cite as: [2010] Fam Law 695, [2010] PTSR 1757, [2010] EWCA Civ 291, [2010] 2 FLR 634

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IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM UPPER TRIBUNAL
(ADMINISTRATIVE APPEALS CHAMBER)
JUDGE MESHER
CF/2266/2007

		Royal Courts of Justice Strand, London, WC2A 2LL
		23rd March 2010

Lord Justice Etherton :

Introduction

1. The issue on this appeal is whether a person with Portuguese nationality is entitled to claim United Kingdom child benefit for his children resident in Portugal in circumstances where he has worked in the United Kingdom and currently lives here but he ceased to work on the ground of incapacity some time before he claimed the benefit. In the light of the way the appeal has been argued, the same issues of principle would arise in the case of a claim for similar benefit by the national of any other member state of the European Union ("EU") living in the United Kingdom. The issue is, therefore, one of general significance.
2. It is important to emphasise at the outset that there is no question of entitlement to child benefit in both countries. The only question is whether the benefit is payable in the United Kingdom rather than Portugal or other EU member state.
3. The appeal is brought by the Commissioners for Her Majesty's Revenue and Customs ("the Commissioners") from the decision of Judge Mesher on 28^th January 2009, sitting in the Administrative Appeals Chamber of the Upper Tribunal. He allowed the appeal of Jose Antonio Lopes Ruas from the Boston Appeal Tribunal, which had itself disallowed Mr Ruas' appeal from the Commissioners' refusal in November 2006 to pay child benefit for Mr Ruas' children in Portugal.
4. The Judge held that Mr Ruas was in principle entitled to United Kingdom child benefit by virtue of Article 73 of EC Council Regulation 1408/71 of 14 June 1971 ("the Regulation"), which is directly effective in the United Kingdom. The Commissioners appeal on the ground that the Judge misinterpreted the Regulation and wrongly held that it disapplied the provisions of section 146(1) of the Social Security, Contributions and Benefits Act 1992 ("the 1992 Act"), which restrict child benefit to children resident in Great Britain.
5. Mr Ruas has served a Respondent's notice in which he seeks to uphold the decision of the Judge on two further grounds. They are that disentitlement to child benefit for his children living in Portugal would constitute unjustified indirect discrimination against migrant workers contrary to Article 3 of the Regulation or Article 18 of the EU Treaty ("the Treaty") (formerly Article 12 of the EC Treaty) or Article 7 of Council Regulation (EEC) 1612/68 or would be inconsistent with the Social Security (Portugal) Order 1979 giving effect to the 1978 Convention on Social Security Between the Government of the United Kingdom and the Government of Portugal.

The Facts

6. The factual context can be stated very briefly. Mr Ruas is a Portuguese national. He came to Britain from Portugal in 2000 with his wife and youngest daughter, Sara. His two elder daughters, Rita Raquel, born in 1988, and Micaela Sofia, born in 1992 remained in Portugal, living with his wife's mother. Mr Ruas worked in Britain and paid national insurance contributions until he became unable to work in 2004 due to ill-health. He remained living in Britain. In 2006 Mr Ruas applied for child benefit for all three of his children. At that time he was in receipt of disability living allowance and income support and qualified for national insurance credits on the ground of incapacity for work. His application was refused in respect of his two elder daughters because they were not, and could not be treated as being, in Great Britain.

The Legal Framework

7. The entitlement to child benefit is laid down in Part IX of the 1992 Act. It is a universal benefit in that, subject to certain qualifications, it is paid to any person responsible for one or more children in any week, and is not dependent upon national insurance contributions or upon any assessment of means. Section 141 of the 1992 Act provides so far as relevant:

"141 Child benefit

A person who is responsible for one or more children … in any week shall be entitled, subject to the provisions of this Part of this Act, to a benefit (to be known as "child benefit") for that week in respect of the child … or each of the children … for whom he is responsible."

8. Section 146 of the 1992 Act makes it a condition of entitlement to child benefit that both the child and the claimant must be in Great Britain during the relevant period. That section is as follows so far as relevant:

"146 Presence in Great Britain

(1) No child benefit shall be payable in respect of a child … for a week unless he is in Great Britain in that week.

(2) No person shall be entitled to child benefit for a week unless he is in Great Britain in that week.

(3) Circumstances may be prescribed in which any person is to be treated for the purposes of subsection (1) or (2) above as being, or as not being, in Great Britain."

9. Mr Ruas does not rely upon any prescribed circumstances within section 146(3) of the 1992 Act.
10. Mr Ruas' entitlement to child benefit rests on the proper meaning and effect of the Regulation, and in particular Article 73, which is as follows:

"Article 73

Employed or self-employed persons the members of whose families reside in a Member State other than the competent State.

An employed or self-employed person subject to the legislation of a Member State shall be entitled, in respect of the members of his family who are residing in another Member State, to the family benefits provided for by the legislation of the former State, as if they were residing in that State, subject to the provisions of Annex VI."

11. Child benefit is a "family benefit" within Article 73.
12. Article 1 of the Regulation contains definitions of expressions used in the Regulation, including, so far as relevant, the following in relation to "employed person" and "self-employed person":

"For the purpose of this Regulation:

(a) employed person and self-employed person mean respectively:

(i) any person who is insured, compulsorily or on an optional continued basis, for one or more of the contingencies covered by the branches of a social security scheme for employed or self-employed persons or by a special scheme for civil servants;

(ii) any person who is compulsorily insured for one or more of the contingencies covered by the branches of social security dealt with in this Regulation, under a social security scheme for all residents or for the whole working population, if such person:

can be identified as an employed or self-employed person by virtue of the manner in which such scheme is administered or financed, or,

failing such criteria, is insured for some other contingency specified in Annex 1 under a scheme for employed or self-employed persons, or under a scheme referred to in (iii), either compulsorily or on an optional continued basis, or, where no such scheme exists in the Member State concerned, complies with the definition given in Annex 1;

(iii) any person who is compulsorily insured for several of the contingencies covered by the branches dealt with in this Regulation, under a standard social security scheme for the who rural population in accordance with criteria laid down in Annex I;"

13. The title of Annex 1 of the Regulation ("Annex 1") is: "Persons covered by the Regulation". Paragraph 1 of Annex 1 is headed "Employed persons and/self-employed persons (Article 1(a)(ii) and (iii) of the Regulation)". It contains a series of definitions of persons to whom the Regulation applies, which have been inserted at the instigation of individual member states. The entry for the United Kingdom, which is at sub-paragraph Y, is as follows so far as relevant:

"Y. UNITED KINGDOM

Any person who is an 'employed earner' or a 'self-employed earner' within the meaning of the legislation of Great Britain or of the legislation of Northern Ireland shall be regarded respectively as an employed person or a self-employed person within the meaning of Article 1 (a)(ii) of the Regulation…"

14. The expressions "employed earner" and "self-employed earner" are defined in section 2(1) of the 1992 Act as follows:

"2 Categories of earners

(1) In this Part of this Act and Parts II to V below—

(a) "employed earner" means a person who is gainfully employed in Great Britain either under a contract of service, or in an office (including elective office) with general earnings; and

(b) "self-employed earner" means a person who is gainfully employed in Great Britain otherwise than in employed earner's employment (whether or not he is also employed in such employment)."

15. It is convenient to set out at this point the following further provisions of the Regulation.
16. The recitals in the Regulation include the following:

"Whereas the provisions for coordination of national social security legislations fall within the framework of freedom of movement for workers who are nationals of Member States and should contribute towards the improvement of their standard of living and conditions of employment;"

"Whereas freedom of movement for persons, which is one of the cornerstones of the community, is not confined to employed persons but also extends to self-employed persons in the framework of the freedom of establishment and the freedom to supply services;"

Whereas the considerable differences existing between national legislations as regards the persons to whom they apply make it preferable to establish the principle that the Regulation applies to all persons insured under social security schemes for employed persons and for self-employed persons or by virtue of pursuing employment or self-employment;"

"Whereas it is necessary to respect the special characteristics of national social security legislations and to draw up only a system of coordination;"

"Whereas it is necessary, within the framework of that coordination, to guarantee within the Community equality of treatment under the various national legislations to workers living in the Member States and their dependants and their survivors;"

"Whereas the provisions for coordination must guarantee that workers moving within the Community and their dependants and their survivors retain the rights and the advantages acquired and in the course of being acquired;"

"Whereas employed persons and self-employed persons moving within the Community should be subject to the social security scheme of only one single Member State in order to avoid overlapping of national legislations applicable and the complications which could result there from;"

"Whereas the instances in which a person should be subject simultaneously to the legislation of two Member States as an exception to the general rule should be as limited in number and scope as possible;"

"Whereas with a view to guaranteeing the equality of treatment of all workers occupied on the territory of a Member State as effectively as possible, it is appropriate to determine as the legislation applicable, as a general rule, that of the Member State in which the person concerned pursues employment or self-employment;"

"Whereas, with a view to determining the legislation applicable to family benefits, the criterion of employment ensures equal treatment between all workers subject the same legislation;"

17. Other provisions of the Regulation relied upon by one or other of the parties include the following:

"Article 2

Persons covered

1. This Regulation shall apply to employed or self-employed persons and to students who are or have been subject to the legislation of one or more Member States and who are nationals of one of the Member States …, as well as to the members of their families and their survivors.

…"

"Article 3

Equality of treatment

1. Subject to the special provisions of this Regulation, persons resident in the territory of one of the Member States to whom this Regulation applies shall be subject to the same obligations and enjoy the same benefits under the legislation of any Member State as the nationals of the State.

…"

"Article 4

Matters Covered

1. This Regulation shall apply to all legislation concerning the following branches of social security:

(a) sickness and maternity benefits;

(b) invalidity benefits, including those intended for the maintenance or improvement of earning capacity;

(c) old age benefits;

(d) survivors' benefits;

(e) benefits in respect of accidents at work and occupational diseases;

(f) death grants;

(g) unemployment benefits;

(h) family benefits

2. This Regulation shall apply to all general and special social security schemes, whether contributory or non-contributory, and to schemes concerning the liability of an employer … in respect of the benefits referred to in paragraph 1.

…"

"Article 13

General Rules

1. Subject to Articles 14c and 14f, persons to whom this Regulation applies shall be subject to the legislation of a single Member State only. That legislation shall be determined in accordance with the provisions of this Title.

2. Subject to Articles 14 to 17:

(a) persons employed in the territory of one Member State shall be subject to the legislation of that State even if he resides in the territory of another member State or if the registered office or place of business of the undertaking or individual employing him is situation in the territory of another Member State.

…

(f) a person to whom the legislation of a Member State ceases to be applicable, without the legislation of another Member State becoming applicable to him in accordance with one of the rules laid down in the aforegoing subparagraphs or in accordance with one of the exceptions or special provisions laid down in Articles 14 to 17 shall be subject to the legislation of the Member State in whose territory he resides in accordance with the provisions of that legislation alone."

"Article 74

Unemployed persons the members of whose families reside in a Member State other than the competent State

An unemployed person who was formerly employed or self-employed and who draws unemployment benefits under the legislation of a Member State shall be entitled, in respect of the members of his family residing in another Member State, to the family benefits provided for by the legislation of the former State, as if they were residing in that State, subject to the provisions of Annex VI. "

Judge Mesher's judgment

18. Judge Mesher accepted Mr Ruas' case that he was entitled to child benefit, being a family benefit within Article 4(1)(h), by virtue of Article 73, read in the light of the definition of "employed person" in Article 1(a). He did not accept Mr Ruas' argument that he fell within limb (i) of Article 1(a) ("limb (i)"). On that issue, he said:

"13. Mr Buley for the claimant argued that he fell within Article 1(a)(i) as being insured for one or more contingencies covered by branches of a social security scheme for employed or self-employed persons only. That and the question whether the UK now has one scheme or many may well need some careful investigation in another case, but for present purposes I am prepared to proceed on the basis put forward by Mr Coppel that in relation to the British social security system Article 1(a)(i) cannot be relied on because even the contributory part of the scheme caters for people who are not employed or self-employed. That also appears to have been the view of the ECJ in a number of cases that I need not cite."

19. The Judge did, however, accept that Mr Ruas fell within limb (ii) of Article 1(a) ("limb (ii)"). Having observed in paragraph 15 of his judgment that Article 2(1) provides that the Regulation applies to, among others, employed and self-employed persons "who are or have been subject to the legislation of one or more Member States" and are nationals of a Member State, he said:

"16. There is no dispute that while he was working in this country the claimant paid the compulsory primary earnings-related Class 1 contributions as an employed person within the meaning of section 2(1)(a) of the Social Security Contributions and Benefits Act 1992 – "a person who is gainfully employed in Great Britain either under a contract of service, or in an office (including elective office) with general earnings". His employer will have paid the compulsory secondary Class 1 contributions. The actual payment of those contributions will have gone towards potential qualification for any contributory benefits and in particular towards a retirement pension, through the attribution of "earnings factors" roughly equivalent to the earnings on which the contributions were calculated. The evidence was that, whether or not the claimant was awarded incapacity benefit for any period after he became incapable of work, he received "incapacity credits" from 4 July 2005 and was receiving income support in October 2006. Although such credits are often referred to as credited contributions, in accordance section 22(5)(a) of the Social Security contributions and Benefits Act 1992 and regulation 8B of the Social Security (Credits) Regulations 1975, what the claimant would have been credited with on the ground of incapacity for work were earnings at the lower earnings limit in force for the purposes of Class 1 contributions in each week of incapacity. Such credited earnings are relevant to qualification to some contributory benefits, including retirement pension.

17. Those circumstances as at August 2006 seem to me to fall squarely within the first indent of Article 1(a)(ii). The claimant had been compulsorily insured and continued to be insured for many branches of social security within the material scope of Regulation No 1408/71, in particular old-age benefits. Then he can be identified as an employed person by virtue of the way that the British scheme is financed and administered, through his actual earnings-related contributions as an employed person and his credited earnings. Therefore, it is not necessary to go on and consider the second indent and any effect of the entry of the UK in Annex I (which would, I tend to agree with Mr Coppel, seem not to take the claimant any further forward, but in my view not to constitute an exhaustive definition). Furthermore, the claimant had plainly been and still was subject to British social security legislation so as to satisfy Article 2(1)."

20. The Judge considered that the present case is in terms of principle on all fours with the decisions of the ECJ in Case C-85/96 Martinez Sala v Freistaat Bayern [1998] ECR I-2691 ("Sala") and Case C-292/96 Sürül v Bundesanstalt für Arbeit [1999] ECR I-2685 ("Sürül").

The Commissioners' case

21. The Commissioners' case is that, at the time of Mr Ruas' application for child benefit for his children living in Portugal, he did not fall within either limb (i) or limb (ii) of Article 1(a) of the Regulation. Although it was contended in the Respondent's notice and the Respondent's skeleton argument that the Judge was wrong to reject Mr Ruas' case that he fell within limb (i), in the course of the hearing before us Mr Richard Drabble QC, for Mr Ruas, helpfully said that, in order to concentrate on his strongest points, he would not be pressing that argument in oral submissions. He also accepted that Mr Ruas did not fall within the second indent of limb (ii) ("limb (ii)(b)"). Accordingly, the critical issue is whether Mr Ruas was entitled to the benefit of Article 73 of the Regulation by virtue of the definition of "employed person" in the first indent of limb (ii) ("limb (ii)(a)").
22. Mr Jason Coppel, counsel for the Commissioners, submitted that the law on that point is unclear, and, for that reason as well as the significant financial and other implications of the issue, this Court should direct a reference to the ECJ for a preliminary ruling. He submitted that such case law as exists is, on balance, in favour of the Commissioners' denial of Mr Ruas' entitlement to child benefit for his children resident in Portugal, but he conceded that this is open to question in view of the passage of time since some of the cases were decided, amendments to the Regulation, including (what is now) Annex 1, changes in the United Kingdom's domestic legislation, and the development of jurisprudence in this area by the ECJ.
23. The Commissioners' case is that, although they accept that Mr Ruas falls within limb (ii), he does not fall within limb (ii)(a). They accept that he falls within limb (ii) because child benefit is available under a social security scheme for all residents. The Commissioners contend, however, that he does not fall within limb (ii)(a) because the scheme for child benefit does not distinguish between employed or self-employed persons and others since entitlement to child benefit does not depend on contributions paid as an employed person. Even if the scheme in limb (ii) is to be regarded as the United Kingdom social security scheme as a whole, the Commissioners say that Mr Ruas cannot be identified under the scheme as an employed person because he is not currently (and, more to the point, was not at the time of his application for child benefit) an employed earner within Annex 1 and the 1992 Act; nor is there any connection between his previous employment, and in particular any national insurance contributions made by him while employed, and his entitlement to child benefit.
24. The earliest decision on which the Commissioners rely is Case 17/76 Brack v Insurance Officer [1976] ECR 1450. The facts of the case were that Mr Brack, a British national resident in Great Britain, had been insured under the British National Insurance scheme since 1948. Until 1957 he paid contributions as an employed person. He subsequently become self-employed and paid contributions as a self-employed person. In September 1974 he went on holiday to France where he fell seriously ill and had to receive immediate medical attention. He returned home to England, and claimed cash sickness benefits for and from the period of his illness in France. He was not entitled to sickness benefit for the period of his illness in France under domestic legislation. The question arose whether he was a "worker" within the Regulation and could therefore benefit under the provisions of Article 22(1). They provided at that time that: "A worker who satisfies the conditions of the legislation of the competent State for entitlement to [sickness] benefits… and : (a) whose condition necessitates immediate benefits during a stay in the territory of another Member State…shall be entitled:… (b) to cash benefits provided by the competent institution in accordance with the legislation which it administers…". The defined expression in Article 1(a) at that time was "worker" rather than "employed person". It did not extend at all at that time to a "self-employed person". Further the equivalent of Annex 1 at that time was Annex V. The relevant part of the entry for the United Kingdom, which was originally inserted when the United Kingdom acceded to what was then the European Economic Community and which reflected the domestic law at that time, was:

"1. All persons required to pay contributions as employed workers shall be regarded as workers for the purposes of Article 1 (a) (ii) of the regulation."

25. As I said, Mr Brack had paid national insurance contributions both as an employed person and subsequently as a self-employed person. He claimed entitlement to sickness benefit calculated on the rate applicable if all those contributions were taken into account.
26. The ECJ observed that certain categories of persons who were not strictly employed persons under the domestic legislation were required to pay contributions as employed persons. It said that the relevant part of the United Kingdom's entry in Annex V was thus intended to ensure that limb (ii) was applied broadly, in that Annex V made it clear that any person who was required to pay contributions as an employed person could be identified as such by virtue of the manner in which the British system was administered or financed in the sense of limb (ii).
27. The ECJ held in paragraph 15 of its judgment that a person in Mr Brack's situation fulfilled the first two conditions in limb (ii) in that he was "compulsorily insured for one or more of the contingencies covered by the branches of social security dealt with in [the] Regulation… under a social security scheme … for the whole working population".
28. The ECJ then said:

"17. Consequently the point to be settled amounts to whether the persons concerned also fulfil the conditions set out in the first indent of subparagraph (ii) namely whether '[such a person] can be identified as an employed person by virtue of the manner in which such scheme is administered or financed', always bearing in mind that, having regard to the facts of the present case, this question need only be considered in relation to the contingency of 'sickness'."

29. The ECJ expressly acknowledged that the Regulation applies to certain categories of persons who, when the contingency occur, do not have the status of "employed persons" in the meaning of employment law:

"21. Lastly, although Regulation No 1408/71, unlike Regulation No 3 which preceded it, no longer employs the expression 'wage-earners or assimilated workers' and merely refers, in the terms of its heading, to 'employed persons', certain of the provisions of this regulation nevertheless show clearly that it also applies to certain categories of persons who, when the contingency occurs, do not have the status of 'employed persons' within the meaning of the law of employment.

22. First, according to Article 2(1) which determines the persons covered by the regulation, the regulation shall apply to workers who are 'or have been' subject to the social security legislaton of one or more Member States.

23. Secondly, under Article 34 of the regulation, for the purposes of Chapter 1 of Title III (the chapter devoted inter alia to the contingency of sickness) a pensioner who is entitled to benefits in kind under the legislation of a Member State as the result of pursuing a professional or trade activity 'shall.. be considered as a worker'

24. Whilst the regulation thus covers certain persons who have lost the status of worker and who are indeed no longer insured under a social security scheme in one of the member States it cannot be excluded that the regulation may be applicable, where appropriate, to persons who, although they have lost the status as employed persons, remain compulsorily insured under the same scheme which covered them previously when they had that status.

25. Finally, as paragraph 1 of Point I (United Kingdom) of Annex V to Regulation No 1408/71 states clearly, the regulation also applies to persons who, in accordance with the relevant national legislation, that is British legislation, are obliged to pay contributions as 'employed persons' although in fact they do not have this status."

30. The essence of the ECJ's reasoning and its conclusion are then to be found in the following paragraphs of its judgment.

"28. Consequently the provision must be understood as referring also to persons who are not 'employed persons' within the meaning of the law of employment but who must be treated as such for the purposes of applying [the Regulation], taking account on the one hand of the objectives and of the spirit of this [R]egulation and of Articles 48 to 51 of the Treaty which form its basis and, on the other hand, of the special features of the administration or financing of the scheme to which such persons are affiliated and of the changes which have taken place in the nature of such affiliation.

29. Those conditions are fulfilled in cases like the present which are distinguished by the fact that on the one hand the person concerned also paid contributions as an employed person to the financing of the relevant scheme and on the other hand that his entitlement to sickness benefits in cash at the full rate depends upon taking account of those contributions.

30. Accordingly the reply to the National Insurance Commissioner must be that persons in the situation described by that tribunal are, under British legislation, 'workers' within the meaning of Article 1 (a) (ii) of the Regulation for the purposes of the application of the first sentence of Article 22 (1) (ii) of that [R]egulation."

31. Mr Coppel submitted that Brack is authority that the definition of "employed person" in limb (ii) (a) is only capable of embracing persons no longer in work if they are persons whose claim to a particular benefit is linked to their previous employment; for example, in the case of the United Kingdom, by establishing a relationship between the benefits claimed and the previous payment of national insurance contributions. There is no such link in the case of child benefit, which is not funded through national insurance contributions, and to which there is an entitlement irrespective of whether the person claiming the benefit has ever been employed.
32. Mr Coppel also relied upon Brack as authority that the United Kingdom's entry in Annex 1 must be taken into account in identifying those entitled to be considered an "employed person" for the purposes of limb (ii)(a), even though Annex 1 is only expressly mentioned in limb (ii)(b). He contended that, accordingly, subject only to the limited extension that those currently unemployed can be regarded as within limb (ii) if there is a connection between the benefit they claim and their previous employment, both limbs (ii)(a) and (ii)(b) are to be regarded, by virtue of the United Kingdom's entry in Annex 1, as restricted to those who are currently "an employed earner" or a "self-employed earner" within the meaning of domestic legislation.
33. Mr Coppel then referred to Case 84/77 Caisse Primaire d'Assurance Maladie d'Eure-et-Loir v Tessier [1978] ECR7 ("Tessier"). In that case Mrs Tessier, while resident in France, claimed to be entitled to French sickness insurance benefits by virtue of the Regulation because she had previously worked as an au pair in Great Britain and during that period she had been entitled to use the National Health Service ("the NHS"). The facts before the ECJ did not establish whether or not during the period she was working in Great Britain she was obliged to pay contributions under the British social security legislation. The NHS was available to all persons ordinarily resident in the United Kingdom. The French Cour de Cassation referred the following question to the ECJ:

"1. Whether a national of a Member State who, while residing in the territory of another Member State for the purposes of working there au pair and, at the same time, of following a part-time course of study, receives in that State social security benefits in kind, is a migrant worker within the meaning of Article 1 of Regulation No 1408/72;"

34. The analysis of the ECJ, and its response to that question, were as follows:

"12. From all these provisions it follows that whatever the occupational status of a national of a Member State who has resided in Great Britain in conditions such that he was subject to a social security scheme applicable to all residents, the applicability to him of Regulation No 1408/71 depends on whether he can be 'identified' as an employed person.

13. In the absence of any criteria based on the manner in which the scheme is administered or financed, pursuant to the first indent of article 1(a)(ii), for the United Kingdom such identification depends by virtue of the second indent and of Annex V on whether the person concerned was required to pay social security contributions as an employed person.

14. It is for the competent national authorities to establish whether or not that condition is fulfilled in a particular case.

15. If a person can be thus identified as a 'worker' within the meaning of Regulation No 1408/71 it follows that in accordance with Article 18 (1) of that regulation the institution of a member state whose legislation makes the acquisition, retention or recovery of entitlement to benefits conditional upon the completion of insurance or employment periods must, in so far as is necessary, take into account the insurance or employment periods completed under the legislation of any other Member State as though such periods had been completed under its own legislation ."

35. Mr Coppel submitted that the analysis of the ECJ in Tessier further supports the Commissioners' argument that limb (ii) requires a "benefit by benefit approach": the "social security scheme" in limb (ii) was the NHS and what was required was some identification of the claimant as an employed person by the manner in which the scheme was administered or financed.
36. In Case C-15/90 Middleburgh v Chief Adjudication Officer [1992] ECR 1-1823 Mr Middleburgh, a British citizen, claimed child benefit while resident in the United Kingdom, in respect of his child in Ireland. He had worked in Ireland between 1981 and 1982, when he was made redundant. He then returned to the United Kingdom. He was initially employed, was then unemployed, and then was self-employed. Mr Middleburgh applied for child benefit for the entire period following his return to the United Kingdom, but the Social Security Commissioner ruled that he was not entitled to child benefit for the period when he was self-employed. Mr Middleburgh claimed to be entitled pursuant to Article 73 and Article 1, although at that time Article 73 had not been extended to self-employed persons. One of the questions referred to the ECJ by the Court of Appeal was as follows:

"Where

(1) a person is self-employed, and

(2) is entitled (under national law) to unemployment benefit upon the involuntary cessation of such self-employment, and

(3) is so entitled by reason of contributions paid or credited as an employed person,

is that person to be regarded as an employed person for the purpose of Article 73 read together with Article 1 of Council Regulation No 1408/71 of 14 June 1971 on the application of social security schemes?"

37. The ECJ's analysis and conclusion on that question were as follows:

"7. Mr Middleburgh submits that during the period from 30 April to 29 July 1984 he was an "employed person" for the purposes of Article 73(1), since he was insured under a compulsory unemployment insurance scheme to which he had paid contributions as an employed person and he may be identified as such by virtue of the manner in which that scheme is administered or financed, in accordance with Article 1(a)(i) and (ii) of the regulation. He observes in that regard that the concept of an "employed person" under Article 73(1) is identical to the concept of "worker" under the same provision in the original version of the regulation, and that the Court has held the latter concept, under certain conditions, to include persons who do not have the status of employed persons from the point of view of labour law.


8. During the period in issue it was only as a self-employed person that the appellant contributed to a social security scheme. The simple fact that if a person in such a situation had then ceased to work he would have been entitled to unemployment benefits by virtue of contributions paid during an earlier period when he was an employed person is not sufficient to justify the conclusion that during the period when he worked as a self-employed person he was insured, compulsorily or on an optional continued basis, for one or more of the contingencies covered by the branches of a social security scheme for employed persons or compulsorily insured for such contingencies under a social security scheme in which he can be identified as an employed person by virtue of the manner in which such scheme is administered or financed, as provided for respectively in Article 1(a)(i) and Article 1(a)(ii) of Regulation No 1408/71 as amended.


9. Nor, in a case such as that before the national court, where child benefits are not linked to contributions paid as an employed person, does the scheme granting entitlement to such benefits permit the appellant to be identified as an employed person for the purposes of Article 1(a)(ii) of the regulation.


10. The answer to the first question must therefore be that a self-employed person who, in the event of his involuntarily ceasing to work, is entitled to unemployment benefits by virtue of contributions paid or credited as an employed person is not an "employed person" for the purposes of Article 73(1) of Regulation No 1408/71, as amended, read in conjunction with Article 1(a)(i) and (ii) of the same regulation."

38. Mr Coppel relies particularly on paragraph 9 of the ECJ's judgment. He submitted that this shows that the words "by virtue of the manner in which such scheme is administered or financed" within limb (ii)(a) require a connection between the child benefit claimed and the claimant's status under the relevant scheme as an employed person. In the context of the United Kingdom, that connection is provided by the payment of contributions in the capacity of an employed person. He submitted that this is precisely the principle which applies in the present case.
39. Joined cases C-4/95 and C-5/95 Stöber and Piosa Pereira v Bundesanstalt für Arbeit [1997] ECR 1-1511 concerned the claims of Mr Stöber, a German national, and Mr Piosa Pereira, a Spanish national, to family allowances from the German administrative authorities in respect of children living outside Germany. Mr Stöber had worked in Ireland from 1965 to 1969, and then returned to Germany. From then until 1977 he was employed and covered by the compulsory statutory sickness and old age insurance scheme. From February 1977 he was self-employed and paid voluntary contributions to the statutory pension scheme for salaried employees and became a voluntary member of a substitute statutory sickness insurance scheme. Mr Piosa Pereira was employed in Germany until 1988 and, as such, was liable to contribute to compulsory sickness and old age insurance schemes. From 1 April 1989 he became self-employed and made voluntary contributions to a recognised independent sickness insurance scheme. By this time Article 73 of the Regulation had been amended to include reference to self-employed persons. Neither Mr Stöber nor Mr Piosa Pereira was entitled under the German legislation to dependent children's allowances in respect of children residing abroad. Mr Stöber and Mr Pereira relied upon Article 73 and Article 1(a). The German authorities relied, however, on the fact that Mr Stöber and Mr Piosa Pereira did not fulfil the conditions in the entry in Annex 1, point 1, C, for Germany, which was as follows:

"If the competent institution for granting family benefits in accordance with Chapter 7 of Title III of the Regulation is a German institution, then within the meaning of Article 1(a)(ii) of the Regulation:


(a) "employed person" means any person compulsorily insured against unemployment or any person who, as a result of such insurance, obtains cash benefits under sickness insurance or comparable benefits;


(b) "self-employed person" means any person pursuing self-employment who is bound:


- to join, or pay contributions in respect of, an old-age insurance within a scheme for self-employed persons, or


- to join a scheme within the framework of compulsory pension insurance.'"

40. Describing the German national court's observations, the ECJ said in paragraph 21:

"21. The national court points out that, according to German case-law and learned writings, only Article 1(a)(ii) is in point where the institution competent to grant family benefits is German. In its view, the specific conditions laid down in Annex I suggest that that provision should apply as a lex specialis with respect to the German legislation on family benefits. The national court observes that that interpretation presupposes that points (i) to (iv) of Article 1(a) are applicable, specifically, to particular risks and schemes. That view is supported by the structure of Regulation No 1408/71, since any other interpretation would make the definition set out in Annex I, point I, C otiose."

41. The reasoning and conclusion of the ECJ on the relevance for limb (ii) of the entry for Germany in Annex 1 were as follows:

"26. The persons covered by Regulation No 1408/71 are defined by Article 2. According to Article 2(1), Regulation No 1408/71 applies, inter alia, to `employed or self-employed persons who are or have been subject to the legislation of one or more Member States'.


27. The expression `self-employed persons' used in that provision is defined by Article 1(a) of Regulation No 1408/71. It means any person who is insured under one of the social security schemes referred to in Article 1(a) for the contingencies and on the conditions mentioned in that provision (Kits van Heijningen, paragraph 9).

….

29.However, according to the terms of Annex I, point I, C, (b), to which Article 1(a)(ii) of Regulation No 1408/71 refers, only workers compulsorily insured under one of the schemes mentioned therein are entitled to German family benefits in accordance with Chapter 7 of Title III of Regulation No 1408/71.


30. Admittedly, as the Court has held (see, in particular, Case 300/84 Van Roosmalen [1986] ECR 3097, paragraphs 18 and 20), the expression `self-employed person' within the meaning of Regulation No 1408/71 must be interpreted broadly, having regard to its objective of contributing towards the establishment of the greatest possible freedom of movement for migrant workers, a principle which is one of the foundations of the Community.


31. However, as the German Government has rightly observed, in so far as Regulation No 3427/89 included self-employed persons among the persons covered by Article 73 of Regulation No 1408/71, the Community legislator was itself entitled to determine which of them it intended to qualify to benefit under its provisions. Accordingly, as far as German family benefits are concerned, the Community legislator chose as its criterion compulsory old-age insurance under a scheme for self-employed persons or within the framework of compulsory old-age insurance.


32. If a worker in a situation of the kind before the national court were allowed to rely on one of the other definitions of `self-employed person' set out in Article 1(a) in order to qualify for German social security benefits, that would be tantamount to depriving the provision in the annex of all effectiveness.


33. As the Advocate General observed in point 32 of his Opinion, it is not possible to reject that conclusion on the basis of the judgment in Kits van Heijningen, in which the Court merely clarified the scope of Regulation No 1408/71, as defined in Article 2, without seeking to resolve the problems connected with the various definitions set out in Article 1(a) of the regulation.


34. Consequently, where the competent institution for the payment of family benefits is German, the notion of self-employed person within the meaning of Article 73 of Regulation No 1408/71 must be interpreted as referring only to persons satisfying the specific conditions set forth in the second indent of Article 1(a)(ii) and point I, C, (b) of Annex I, the definitions set out in Article 1(a)(i) and (iv) being applicable as appropriate to the other contingencies against which the worker is voluntarily insured."

42. Mr Coppel submitted that the ECJ's reasoning again supports the view that the wording of limb (ii) and limb (ii)(a) requires the identification of, and linkage between, particular risks and schemes, and also that limb (ii)(a) as well as limb (ii)(b) are to be read and applied as restricted by the country entries in Annex 1. He relied, in this context, on the fact that (as is apparent from paragraph 31 of the ECJ's judgment) the Regulation is a co-ordinating and not a harmonising instrument. He submitted that the same paragraph in the ECJ's judgment confirms, if confirmation were needed, that the entries in Annex 1 are as much a part of the Regulation, and to be given equal status, as its other provisions.
43. Mr Coppel submitted that Mr Ruas' claim for child benefit for his children in Portugal should, on the basis of those authorities, plainly fail. His argument was as follows. Those authorities show that a person can only fall within limb (ii)(a) if the particular risk covered by the insurance falls within a particular scheme, and the manner in which such scheme is administered provides a linkage between the risk or benefit claimed and the claimant's status as an employed person. Furthermore, the relevant country entry in Annex 1 may both explain the manner in which the scheme is administered or financed and limit what might otherwise be the wider operation of limb (ii)(a). The effect of those requirements and matters in the present case is that Mr Ruas had no entitlement to the child benefit claimed in respect of his children living in Portugal. Mr Ruas did not fall within the terms of the United Kingdom's entry in Annex 1 since he was not employed or self-employed at the time he made his claim for child benefit; nor is there any linkage between his previous employment and child benefit, the entitlement to which does not depend upon present or past employed or self employed status. If limb (ii)(a) were to be interpreted as covering non-contributory benefits, it would lack any real meaning or force. Further, the scope of the Regulation, in terms of the matters within Article 4, is different from the range of persons who can claim under it. The Commissioners' interpretation of Article 73 and Article 1(a) makes greater sense of the need for Article 74, which deals expressly with the right of an unemployed person who was formerly employed or self-employed, and who draws unemployment benefits, to family benefits for members of his or her family residing in another member state. A wider interpretation of limb (ii) undermines the need for Article 74. A wide interpretation of limb (ii), and in particular limb (ii)(a), would also make the country entries in Annex 1 redundant.
44. In his skeleton argument, Mr Coppel said that the Judge's reasoning cuts across careful distinctions drawn by the Regulation between employed persons and unemployed persons, and, for example, pensioners. In that connection, he pointed to a number of places within the Regulation where rights are set out for each category of persons separately: for example, in the context of sickness and maternity benefits, Title III, Chapter 1, section 2 sets out rights for employed and self-employed persons, section 3 sets out rights for unemployed persons and section 4 sets out rights for pensioners. These distinctions, he said, would be undermined if the Judge was right to consider that Mr Ruas, who was unemployed at the time of his claim, was actually an employed person.
45. Mr Coppel submitted that Judge Mesher was wrong to place so much weight on Sala and to interpret the judgment in that case as he did. The facts of that case were that Mrs Sala, a Spanish national, had been living in Germany from a young age. She was employed for several years. She then became unemployed and was in receipt of social assistance. On the birth of her second child she applied for a child raising allowance in accordance with the relevant German legislation. That application was rejected on the ground that she was neither a German national nor in possession of a residence permit or other form of residence authorisation granted for humanitarian or political reasons. She was not at risk, however, of being deported from Germany. The German legislation provided that a non-national wishing to receive a child raising allowance must be in possession of a residence entitlement or a residence permit, and the German court had consistently held that a person was "in possession" of a residence entitlement only if he had a document from the Foreigners' Office duly attesting his right of residence at the start of the benefit period; an entitlement to stay was not sufficient. Mrs Sala did not have a valid residence permit at the date of her application. Mrs Sala claimed to be entitled to the child raising allowance as an employed person within Article 1(a). The first question referred to the ECJ for a preliminary ruling was as follows:

"(1) Was a Spanish national living in Germany who, with various interruptions, was employed until 1986 and, apart from a short period of employment in 1989, later received social assistance under the Bundessozialhilfegesetz (Federal Social Welfare Law, the 'BSHG') still, in 1993, a worker within the meaning of Article 7(2) of Regulation No 1612/68 or an employed person within the meaning of Article 2 in conjunction with Article 1 of Regulation (EEC) No 1408/71? "

46. The ECJ approached that question as reflecting a general issue:

29. By its first question the national court is asking essentially whether a national of one Member State who resides in another Member State, where he is employed and subsequently receives social assistance, has the status of worker within the meaning of Regulation No 1612/68 or of employed person within the meaning of Regulation No 1408/71."

47. In view of the importance of this case in the judgment of Judge Mesher and the argument before this court, it is appropriate to set out in full the analysis and conclusion of the ECJ on the status of employed or self-employed persons within the meaning of the Regulation:

"35. Article 2 of Regulation No 1408/71 provides that it is to apply to employed or self-employed persons who are or have been subject to the legislation of one or more Member States and who are nationals of one of the Member States as well as to the members of their families.

36. So a person has the status of employed person within the meaning of Regulation No 1408/71 where he is covered, even if only in respect of a single risk, compulsorily or on an optional basis, by a general or special social security scheme mentioned in Article 1(a) of Regulation No 1408/71, irrespective of the existence of an employment relationship (see, on this point, Case 182/78 Pierik II [1979] ECR 1977, paragraphs 4 and 7, and Joined Cases 82/86 and 103/86 Laborero and Sabato [1987] ECR 3401, paragraph 17).

37. The Commission therefore takes the view that the appellant must be considered to be an employed person within the meaning of Regulation No 1408/71 simply by virtue of the fact that she was covered by compulsory retirement pension insurance in Germany or that the social welfare body gave her and her children sickness insurance cover and paid the relevant contributions.

38. Similarly, at the hearing, the French Government argued that the appellant in the main proceedings could be considered to be a worker for the purposes of Community social security law because she was - and possibly still is - covered in one way or another by a German retirement pension scheme.

39. However, the German government points out that, according to Annex I, point I, C ('Germany'), of Regulation No 1408/71, in the context of family benefits, of which the allowance in issue is one, only a person compulsorily insured against unemployment or who, as a result of such insurance, obtains cash benefits under sickness insurance or comparable benefits may be classified as an employed person.

40. At the hearing, the Commission also pointed out that in the Court's judgment of 30 January 1997 in Joined Cases C-4/95 and C-5/95 Stöber and Piosa Pereira [1997] ECR I-511 the argument that being insured against only one risk mentioned in Regulation No 1408/71 was sufficient for a person to be classified as an employed person within the meaning of that regulation had been called in question.

41. It is to be noted that, at paragraph 36 of its judgment in Stöber and Piosa Pereira, the Court expressed the view that there was nothing to prevent Member States from restricting entitlement to family benefits to persons belonging to a solidarity system constituted by a particular insurance scheme, in that case an old-age insurance scheme for self-employed persons.

42. According to Annex I, point I, C ('Germany'), to which Article 1(a)(ii) of Regulation No 1408/71 refers, only persons compulsorily insured against unemployment or persons who, as a result of such insurance, obtain cash benefits under sickness insurance or comparable benefits can be considered, for the purposes of the grant of family benefits pursuant to Title III, Chapter 7, of Regulation No 1408/71, to be employed persons within the meaning of Article 1(a)(ii) of that regulation (Case C-266/95 Merino García [1997] ECR I-3279).

43. As is clear from the wording of that provision, Annex I, point I, C, of Regulation No 1408/71 clarified or narrowed the definition of employed person within the meaning of Article 1(a)(ii) of that regulation solely for the purposes of the grant of family benefits pursuant to Title III, Chapter 7 of the regulation.

44. Since the situation of a person like the appellant in the main proceedings is not covered by any of the provisions of Title III, Chapter 7, the restriction laid down by Annex I, point I, C, cannot be applied to her, so that the question of her status of employed person within the meaning of Regulation No 1408/71 must be determined solely on the basis of Article 1(a)(ii) of that regulation. Such a person will therefore be able to enjoy the rights attaching to that status once it is established that he or she is covered, even if only in respect of a single risk, compulsorily or on an optional basis, by a general or special social security scheme mentioned in Article 1(a) of Regulation No 1408/71.

45. Since the order for reference does not provide sufficient information to enable the Court to take account of all the circumstances which may be relevant in this case, it is for the referring court to determine whether a person such as the appellant in the main proceedings comes within the scope ratione personae of Article 48 of the Treaty and of Regulation No 1612/68 or of Regulation No 1408/71. "

48. Accordingly, Mrs Sala had the status of an employed person within the meaning of Article 1 (a) even though she was not in employment at the date of her application for child raising allowance, simply by virtue of the fact that she was covered (or rather she was assumed to be covered) by compulsory retirement pension insurance in Germany, and without any specific link between her entitlement to family benefit and her previous employment. Mr Coppel submitted that there were numerous grounds for distinguishing Sala and the apparent width of the ECJ's judgment. His starting point was that Sala was not a United Kingdom case, and that it turned upon social security arrangements and benefits in Germany. Secondly, he said that it was significant that the ECJ's approach was to look, first, at the entry for Germany in Annex 1, which was restricted to family benefits within Chapter 7 of the Regulation. The ECJ could obtain no assistance from that entry since Mrs Sala's situation was not covered by any of the provisions of Chapter 7. By contrast, Mr Coppel submitted, the United Kingdom entry in Annex 1 would either be determinative of entitlement under limb (ii)(a) or, at any event, highly material in the application of limb (ii)(a). Thirdly, he said that it is not clear from the ECJ's judgment whether the ECJ was deciding the first question under limb (i) or limb (ii). In paragraph 4 of the judgment reference is made specifically to the terms "employed person" and "self-employed person" in limb (i). He pointed out that it appeared from Stöber that Germany has schemes for employed and self-employed persons within limb (i). Fourthly, he submitted that paragraph 44 of the judgment, which is a critical paragraph, does not expressly address the separate requirements of limb (ii)(a). The Commissioners' case is not inconsistent with a jurisprudential requirement of Community law that there must be a scheme under which the claimant is insured for a single risk. He submitted that paragraph 44 begs the question whether any such scheme existed and, in that context, it is significant that the ECJ held in paragraph 45 that it had insufficient information to determine whether Mrs Sala did indeed come within the Regulation. Fifthly, he pointed out that the ECJ did not expressly overrule or distance itself from Brack, Middleburgh and Stöber. Reference was expressly made by the ECJ to Stöber in paragraphs 40 and 41 of its judgment. Finally, Sala was not a case under Article 73 at all. Mrs Sala's claim for child raising allowance was for her child living with her in Germany, and the case was really about equality of treatment and the principle of non-discrimination.
49. Despite those matters on which Mr Coppel relied for distinguishing and confining the judgment in Sala, he conceded that, in the light of that judgment, the now historic judgments of the ECJ in Brack, Middleburgh and Stöber, and changes in the Regulation over time, there remains a sufficiently large degree of uncertainty to warrant a reference to the ECJ rather than simply to allow or dismiss the appeal.

Discussion

50. Notwithstanding the detailed and skilful submissions of Mr Coppel, I agree with Judge Mesher's lucid judgment and his conclusion that Sala clearly confirms Mr Ruas' entitlement to child benefit.
51. If the Community jurisprudence had ended with Stöber, I consider that there would have been sufficient doubt to warrant a reference to the ECJ. Brack, Tessier, Middleburgh and Stöber do not clearly support the Commissioners' case that the effect of the United Kingdom's entry in Annex 1 is to restrict limb (ii)(a) to persons who are currently an "employed earner" or a "self-employed earner" within the meaning of the domestic legislation or a person claiming a benefit who was previously employed and whose national insurance contributions can be linked to the benefit claimed. It is certainly possible to interpret those authorities, or alternatively passages within them, as supporting that interpretation, but it is far from clear that this is what the ECJ intended to hold in those cases.
52. At the time of Brack the wording of Article 1(a) and Annex 1 was different from the current version. It is clear from Brack that, notwithstanding the terms of Annex 1, Article 1(a) was not restricted to persons currently in employment. Subsequent cases clearly confirm that position. Furthermore, it is apparent that the ECJ regarded the United Kingdom's entry in Annex 1 as clarifying, rather than restricting, limb (ii):

"12. Accordingly the answer to the national tribunal must be that, far from restricting the definition of 'worker' as it emerges from Article 1 (a), the provision in paragraph 1 of Point I (United Kingdom) of Annex V to Regulation No 1408/71 is solely concerned to clarify the scope of subparagraph (ii) of this paragraph vis-a-vis British legislation ."

53. It is true that, in paragraph 29 of the judgment in that case, the ECJ expressly observed that Mr Brack had previously paid contributions as an employed person and his entitlement to sickness benefits at the full rate depended upon taking into account those contributions. That paragraph, however, highlights one of the difficulties of analysing the ECJ's judgment. There were two separate issues, namely, whether Mr Brack was an employed person within limb (ii) and also whether the contributions he had made as a self-employed person were to be taken into account in the calculation of his sickness benefits. The ECJ's judgment does not address the two issues separately, but it conflates them.
54. Tessier does not appear to me to assist the resolution of this appeal. The recorded facts do not indicate Mrs Tessier's legal employment status while she was working as an au pair in the United Kingdom and, in particular, whether she ever paid or was required to pay national insurance contributions. Nor is it clear from the ECJ's judgment whether the ECJ was treating the NHS as a separate social security scheme. In the event, it was left to the national authorities to establish whether or not the requirements of limb (ii) were satisfied. On the other hand, the ECJ certainly accepted in Tessier that a claimant for benefits need not be currently employed in order to qualify as an employed person within limb (ii).
55. As Mr Richard Drabble QC pointed out, Middleburgh is to be understood in the context of the confinement of Article 73 at that time to employed persons. Mr Middleburgh's problem was that, in respect of the period in question for which he claimed child benefit, he was self-employed. His argument was that, if he had been unemployed during the period, he would have been entitled to receive unemployment benefit by virtue of the contributions he had previously made when he had been an employed person. The question was whether that was sufficient to bring him within the status of an employed person within Article 73. The Advocate General (Mischo) observed in paragraph 17 of his opinion that Mr Middleburgh could not at the same point of time be both self-employed and unemployed or employed and self-employed. That simple analysis may help to explain the very terse reasoning in paragraphs 8 and 9 of the ECJ's judgment. It seems right to infer that paragraph 9 of the ECJ's judgment, on which Mr Coppel heavily relies, reflects observations of the ECJ in Brack. It can be read, however, in the context I have described, as simply saying that if, as had been the case in Brack, the child benefit had been linked to contributions previously paid while Mr Middleburgh was employed, the situation would have been different. It is not at all clear, in the context of the facts and the issue in the case, that the ECJ was intending to say that in every case, in order to qualify as an employed person within limb (ii), it was necessary for the benefit claimed to be linked to contributions made as an employed person. That approach to the proper meaning of paragraph 9 is supported by the fact that, as appears from paragraph 14 of the Advocate General's opinion, it was the applicant who was seeking to rely on Brack. The Advocate General distinguished Brack in paragraph 15 of his opinion, on the basis that the sickness benefit claimed by Mr Brack had been funded by contributions which had been made but the benefit of which he risked losing by virtue solely of the place in which the risk materialised, whereas "the family benefit at issue in the present case is not linked to such contributions".
56. Mr Drabble fairly accepted that some of the comments in Stöber, particularly paragraphs 32 and 34, are expressed in wide terms suggesting that entries in Annex 1 may colour the entirety of limb (ii) and in a restrictive manner. On the other hand, it appears that the case was strictly only about limb (ii)(b) since the German legislation on dependent children's allowances was a scheme for the "family benefits" branch, which applied to all residents and whose manner of administration did not make any distinction between employed and self-employed persons (paragraph 19). Further, the ECJ in Stöber regarded the entry for Germany in Annex 1 as restrictive rather than, as the ECJ in Brack appeared to have viewed the United Kingdom entry in Annex 1, as merely clarificatory. Indeed, Mr Coppel accepted that the United Kingdom entry does serve a clarificatory purpose. The definition of "employed earner" in the 1992 Act makes it clear, for example, that an office holder may fall within the definition. I do not, therefore, accept that the interpretation argued for limb (ii) on behalf of Mr Ruas would deprive the United Kingdom's entry in Annex 1 of all effectiveness.
57. For those reasons, the position under those authorities was, at best, doubtful in relation to the issue on this appeal. These doubts were, however, removed by the ECJ's judgment in Sala. The fact that Mrs Sala was not claiming under Article 73 and that the case concerned German family benefits are no grounds for distinguishing the ECJ's reasoning and conclusion. The first question addressed by the ECJ was the meaning of "employed person", which the ECJ proceeded to analyse by reference to the definition in Article 1(a) of the Regulation. That definition cannot mean different things in relation to different Articles, although the extent of its application may depend on the particular context. The German setting was irrelevant: the ECJ held that the entry for Germany in Annex 1 had no application and so the case turned on the proper application of Article 1(a) without regard to that entry. Furthermore, it is clear from paragraph 44 of the ECJ's judgment that the ECJ was concentrating on the requirements of limb (ii). There is nothing in the reasoning in that or the immediately preceding paragraphs to indicate any intention to confine the reasoning to other parts of Article 1(a). The ECJ plainly did not require, for the purposes of Mrs Sala's entitlement as an employed person within limb (ii), that she should be in current employment or that there should be a link between the benefit she claimed and her previous employment. That conclusion was the result of the jurisprudence, accepted by the ECJ, that it was sufficient that Mrs Sala was insured against only one risk mentioned in the Regulation: in her case, for example, compulsory retirement pension insurance, which had nothing to do with the benefit she was claiming. It is clear from paragraph 8 of the ECJ's judgment that the child raising allowance in Germany was a non-contributory benefit. I do not consider that the significance of Sala is undermined by the reference in paragraph 45 of the judgment to the absence "of sufficient information to enable the Court to take account of all the circumstances which may be relevant in this case." The analysis of the ECJ proceeded on the assumption that Mrs Sala was insured for sickness and retirement, but it was for the national court to verify the precise circumstances of the insurance scheme. On the assumption made, Mrs Sala was found to be within limb (ii). That is sufficient for the purposes of Mr Ruas' case.
58. That interpretation of Sala is confirmed by Case 182/78 Bestuur van het Algemeen Ziekenfonds Drenthe-Platteland v G. Pierik [1979] ECR 1977. In that case Mrs Pierik was in receipt of an invalidity pension in the Netherlands and had claimed repayment of the costs relating to medical treatment received in Germany. The first question referred by the Dutch Court to the ECJ was essentially "whether the provisions of Article 22 of [the Regulation], governing the right of a "worker" to benefits in kind, also cover a pensioner "who is not, or is no longer, at work" and who asks the competent institution for authorisation to go to a Member State other than the one where he resides to receive there the treatment appropriate to his state of health" (para. 3).
59. The analysis of the ECJ and its conclusion on this issue are to be found in paragraphs 4 to 8 of its judgment as follows:

"4. Article 1 (a) of Regulation No 1408/71 defines the concept of "worker" as any person who is compulsorily or voluntarily insured under one of the social security schemes referred to in subparagraphs (i), (ii) or (iii) of that provision. Laid down "for the purpose of this regulation", such a definition has a general scope, and in the light of that consideration covers any person who has the capacity of a person insured under the social security legislation of one or more Member States, whether or not he pursues a professional or trade activity. It follows that, even if they do not pursue a professional or trade activity, pensioners entitled to draw pensions under the legislation of one or more Member States come within the provisions of the regulation concerning "workers" by virtue of their insurance under a social security scheme, unless they are subject to special provisions laid down regarding them .


5. Articles 27 to 33 in title III, Chapter 1, Section 5 of Regulation No 1408/71 lay down special provisions concerning "pensioners and members of their families". By virtue of Article 34, these provisions apply exclusively to pensioners who are entitled to benefits in kind otherwise than as a result of pursuing a professional or trade activity, thus covering inactive pensioners.

6. However, Article 31 of these provisions governs the entitlement of such insured persons to benefits in kind where those benefits become necessary during a stay in a Member State other than the one in which they reside. On the other hand, the entitlement to benefits in kind of an insured person who resides in one Member State and asks the competent institution for authorization to go to the territory of another Member State to receive there the treatment appropriate to his condition is governed by Article 22 (1) (c) in the same chapter.


7. By the reference to a "worker" in the latter provision, Regulation No 1408/71 does not purport to restrict the scope of that provision to active workers as opposed to inactive workers, the same reference being contained in articles 25 and 26 in the same chapter, which respectively concern "unemployed persons" and "pension claimants".


8. For these reasons the answer to the first question should therefore be that, in the case of a pensioner who is entitled to benefits in kind under the legislation of a Member State and who does not pursue a professional or trade activity, the right to be authorized by the competent institution to go to another Member State to receive there the treatment appropriate to his condition is governed by the provisions of Article 22 (1) (c) and (2) of Regulation No 1408/71 ."

60. As I have said, the Judge relied on Sürül as confirming his analysis and conclusion based on Sala. Reliance is placed on Sürül in the Respondent's skeleton argument, but we were not taken to it by Mr. Drabble in the course of his oral submissions. It was concerned with the proper meaning and effect of Decision 3/80 of the Association Council of 19 September 1980 on the application of the social security schemes of the member states of the European Communities to Turkish workers and members of their families. ("Decision 3/80"). The significance of the case is that Article 1 of Decision 3/80 contains a definition of "worker" similar to that for an "employed person" in limbs (i) and (ii) of Article 1(a) of the Regulation. The ECJ referred to and followed the analysis of the Regulation in Sala, holding that "a person has the status of worker where he is covered, even if only in respect of a single risk, on a compulsory or optional basis, by a general or special social security scheme, irrespective of the existence of an employment relationship" (para. 86). While Sürül confirms, if confirmation were needed, that the analysis in Sala is not in any sense a jurisprudential aberration, it does not take the matter any further.
61. The way in which I have analysed Sala and its implication for Mr Ruas' case is supported by the policy underlying the Regulation disclosed by its recitals. They show that, although the Regulation is an instrument for co-ordination rather than harmonisation, the policy underlying the Regulation is that, in support of the freedom of movement of workers who are nationals of member states, employed persons and self-employed persons moving within the Community should be subject to the social security scheme of only one single member state in order to avoid the overlapping of national provisions and ensuing complications, and that the exceptions to the general rule should be as limited as possible. That policy is most graphically and simply reflected in Article 13, which provides that, with certain exceptions, the persons to whom the Regulation applies shall be subject to the legislation of a single member state only. The Judge's interpretation, far from depriving limb (ii)(a) of any force, as Mr Coppel submitted, provides it with a meaning and effect which reflect a coherent policy.
62. I do not consider that the Commissioners' case is advanced by reference to other parts of the Regulation, such as the different rights expressly conferred under Title III, Chapter 1, on employed or self-employed persons, on the one hand, and unemployed persons on the other hand. The fact that express distinctions are made in the Regulation for particular categories of claimant in the case of particular categories of benefits does not help to establish that "employed person" in Article 73 means something other than its defined meaning in Article 1(a).
63. Specifically in the context of family benefits, I do not consider that it is a necessary implication of Article 74 that the term "employed person" in Article 73 bears a different meaning to its defined meaning in Article 1. It is inconceivable that, if that had been the intention, it would not have been stated much more clearly. Unlike Article 73, which is addressing a situation in which the employed or self-employed person is in one member state and members of his family are in another member state, Article 74 provides a right to family benefits in the member state in which the claimant is claiming unemployment benefit, regardless of whether the claimant or members of his family are present in that state. It is possible, as Mr Drabble suggested, that Article 74 is therefore directed particularly to the situation where an unemployed person claiming unemployment benefit in one member state moves with his family to seek work in another member state, retaining in the meantime the right to continue to receive unemployment benefit for a limited period. There is no reason to think that it throws any light on the situation, such as the one presently under consideration, where an unemployed person, who has previously moved from the member state of which he is a national to another member state where he worked and continues to live, claims family benefits for a family member living in the member state from which he came or some other member state.
64. For those reasons I would dismiss this appeal.

The Respondent's notice

65. Encouraged by the Court to concentrate on the strongest of the further grounds for upholding the Judge's order mentioned in the Respondent's notice, Mr Drabble confined his oral submissions, on this aspect of the appeal, to the issue of indirect discrimination contrary to Article 18 of the Treaty and Article 3 of the Regulation. Those issues are important and were well argued on both sides, but, in the event, it is not necessary to address them to dispose of the appeal.

LORD JUSTICE MOORE-BICK

66. I agree

LORD JUSTICE CARNWATH

67. I also agree.